The naira closed on Christmas Eve at an all-time low of N1,537 per dollar, marking a slight improvement from the previous day’s N1,538/$1. This new low surpasses the naira’s previous worst performance of N885.88/$1 recorded on 22 December 2023, signaling a significant deterioration in the currency’s value. Over the past year, the naira has weakened by an eye-watering 42 per cent, driven by a combination of macroeconomic pressures, including inflation, foreign exchange shortages, and inconsistent monetary policies.
According to the Central Bank’s exchange rate portal, the official exchange rate for the day ranged between N1,533 and N1,545 to the dollar, reflecting the volatility in the foreign exchange market. Businesses wrapped up earlier than usual for the Christmas holiday, contributing to the fluctuations. Despite the year’s dismal performance, the naira has gained 8 per cent month-to-date since the Central Bank introduced the new foreign exchange trading system, EFEMS.
On the parallel market, where currencies are traded unofficially, the exchange rate hovered between N1,650 and N1,655 to the dollar. After a period of high volatility earlier in the month, where the rate surged above N1,700, the market has seen a degree of stabilization. The Central Bank has recently allowed Bureau de Change operators to purchase up to $25,000 weekly from the Nigerian Foreign Exchange Market (NFEM) and permitted Nigerians traveling abroad to buy foreign currency for travel allowances from commercial banks, measures intended to ease pressure on the forex market.
Despite these efforts, the naira’s continued depreciation highlights the challenges faced by Nigeria’s economy as it navigates an uncertain financial landscape.
